U.S. Secretary of State John Kerry with Israel Prime Minister Benjamin Netanyahu

TEL AVIV – The latest evolution in Secretary of State John Kerry’s bid to create a Palestinian state has seen the U.S. drop several demands of Israel, prompting Palestinian disappointment, according to informed Israeli and Palestinian diplomatic sources.

Still, the plan calls for major Israeli evacuations, and even forfeiting administration of eastern Jerusalem’s holy sites.

Until now, Kerry has been steadfast in the U.S. refusal to accept anything less than a final status agreement on the main issues, repeatedly rejecting Israeli Prime Minister Benjamin Netanyahu’s request for an interim, multi-staged deal.

The U.S. has for now acquiesced to Netanyahu’s concept of an interim agreement, leading to several changes in the behind-the-scenes talks on key issues, the sources said.

Kerry had pressed for the Palestinians and international monitors to assume control of the strategic Jordan Valley, with allotments for Israeli security stations.

Now the U.S. is seeking a 10-year agreement on the Jordan Valley in which Israelis will have complete military sovereignty over the area while the Palestinians will be allowed to construct in what is known as Region C, territory where Israel currently has full Israeli civil and security control.

Israel would need to remove its civilian settlements from the valley.

If both sides keep the deal, after a period of 10 years there would be a transition to international and Palestinian forces controlling the Jordan Valley, according to the sources speaking about Kerry’s plan.

The Jordan Valley cuts through the heart of Israel. It runs from the Tiberias River in the north to the Dead Sea in the center to the city of Aqaba at the south of the country, stretching through the biblical Arabah desert.

Wednesday, Israel’s Army Radio reported Kerry drafted a plan that would see all of Israel’s Jordan Valley civilian settlements dismantled. That detail was first exclusively reported by WND this past October.

Meanwhile, on Jerusalem, Kerry is asking for the international community to administer the holy sites in the eastern section of the city, while details are still being disused about whether Palestinians will have some symbolic presence in the area.

WND first reported earlier this month on Kerry’s plan calling for an international administrative mandate to control holy sites in eastern Jerusalem.

The exact composition of the international mandate is up for discussion, but Kerry’s plan recommended a coalition that includes the Vatican, together with a group of Muslim countries such as Turkey and Saudi Arabia.

The international arrangement is being proposed as a temporary solution for about two to three years while security arrangements in Jerusalem between Israelis and Palestinians are finalized, said Israeli and Palestinian diplomatic sources.

Kerry’s change in bargaining position is not without major hitches. The diplomatic sources told WND the Palestinian Authority is deeply disappointed and plans to lobby the Arab League and European countries to press the U.S. to return to demanding a final status deal before April.

The sources said Kerry is due back in the region within 10 days. They said Kerry plans to bring a large team with the goal of lobbying the Israeli public, lawmakers and military officials here to accept his latest deal to create a Palestinian state.